Wednesday, October 5, 2022

Best Practices in Inventory Management Your Business Must Know

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If your inventory management is not happening as it has to, no worries, there is always a scope for improvement. However, this is one area that you cannot neglect in the good interest of driving accountability, transparency, and effectiveness across your business. Here are a few inventory management best practices your business can benefit from.

ABC of inventory management
Categorize your items in terms of most selling, medium selling and low priority stock. Organizing your stock in this way can help optimize your storage space and also streamline the fulfilment of orders.

Streamline picking and packing
For the purpose of fulfilling the customer orders quickly and efficiently, you must pick and pack goods in a streamlined fashion.

Keep your top selling items near the packaging section. Keep the warehouse section in an organized fashion so that the areas look neat and clean.

For managing the warehouse, implement a program that will list the items picked in the order that the picker will have to find them.

For the sake of accurate counting, double check every order. Make the effective use of RFIDs and barcodes on every item in the inventory to facilitate easy counting.

Create an inventory KPI
Inventory KPIs are known to measure your performance in any given segment over a period of time to ensure if you are moving towards your specific goal. By providing clear milestones for a given period of time, they help rule out any guess work. With their help, you can have the data that you will require to make smart and strategic decisions for your business. The areas that you will need to focus in these lines include carrying costs of inventory, writing off inventory and writing down inventory, inventory turnover rate, cycle time, order tracking and order status, and fill rate.

Use batch tracking efficiently
Also referred to as lot tracking, batch tracking is the process of tracking goods efficiently along the distribution chain with the help of batch numbers. A batch refers to a given set of goods that were manufactured together employing the same set of raw materials. An automatic batch tracking system can enter the information about all the products within a given batch and give you access to that information whenever you need it.

Employ a precise formula for reorder point
The ultimate benefit of a reorder formula is to let you know approximately when you must procure more stock. This is when you will reach the lowest amount of goods before you will require more. When managed properly, this strategy can help avoid the loss due to market slumps and spikes.

Outsource inventory management
Inventory management is a critical area that is one of the most crucial deciding factors for the success of your business. Outsourcing inventory management to efficient and dedicated service providers can let you enhance the efficiency of inventory management and also minimize the costs on your workforce. How a knowledgeable and experienced inventory management services will help you can never be overstated.

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